2 Market-Moving Events Not in Your Forex Calendar

The forex calendar is already chock-full of major economic events that you can trade but there are a couple of potential market-movers that might not have been listed. Don’t say I didn’t warn you about these!

With oil and other commodities under the spotlight these days, forex traders have been paying closer attention to related events that might influence prices. In particular, any announcements regarding oil production changes or dairy prices have been pushing the commodity currencies around and affecting overall risk sentiment. Here are the upcoming events that you should also watch out for:

1. Fonterra announcement (Thursday)

cowMarket participants had been pricing in their expectations for the Fonterra board meeting as early as Monday, when financial institutions in New Zealand started buzzing about a potential upgrade in the company’s dairy price forecasts and milk payouts. This is a pretty huge deal since Fonterra is the largest company in New Zealand and is producing approximately 30% of all the dairy in the world!

Thanks to the consecutive price increases logged in the country’s dairy auctions so far this year, economists at Westpac and the Bank of New Zealand predict that Fonterra may be able to beat its current milk price forecast of $4.70/kg. To top it off, they also project that the company might upgrade its milk forecasts and payouts for the next season.

Bear in mind that dairy prices have tumbled close to 50% last year, dragging the New Zealand dollar lower in the process. Any signs of a strong rebound in the dairy industry could allow the Kiwi to regain ground, as these could eventually translate to stronger growth for New Zealand’s export-driven commodity-dependent economy.

2. OPEC emergency meeting (“In the next six weeks or so”)

I kid you not when I say that the OPEC might drop a bombshell on the markets “in the next six weeks or so” because these are the exact words of Nigerian Oil Minister and OPEC President Diezani Alison-Madueke. As it turns out, the oil cartel’s head honchos are currently watching oil price trends and volatility very closely and might call an emergency meeting soon.

According to the OPEC President, almost all member nations (except the Arab bloc) are feeling uncomfortable about the continuous slide in oil, as they had hoped that prices would stabilize around $60/barrel. She mentioned that the surge in shale oil mining operations in the U.S. has resulted to increased stockpiles and lower demand for OPEC-produced oil, driving overall market prices down. Analysts predict that the oil cartel might be gearing up for a large cut in oil production in order to restrict supply and boost prices.

Should they refrain from cutting production like they did so back in November last year, oil prices might be in for more declines, lending more downside for the oil-related Canadian dollar. After all, Canada is heavily dependent on its crude oil industry and falling prices would mean lower trade revenues. Heck, if OPEC member nations decide against having an emergency meeting pronto, oil prices and the Loonie could plummet once more!

With these potential market-movers lined up, are you making any adjustments to your comdoll forex trades? Don’t be shy to share your thoughts in our comments section!

 


 

  • ForExchange

    Hi Forex Gump,

    as for me, I expect a positive dairy reading as it has been on the upside lately. NZD also started to rise.

    On the OPEC meeting, well my question is: “Why would Saudi Arabia cut production? Only because Nigeria has problems?” I mean they knew it exactly what they are about to do when they decided to keep the production up. So they will not care about Nigeria I think. They want to drive out competition and that is all. Saudi Arabia also loses money but they just want to sit out the others.

    What do you think?

    FE

    • I’m expecting positive news from the Fonterra announcement too, but I’m inclined to think that much of the Kiwi’s reaction has mostly been priced in already. That’s an interesting view on the OPEC and perhaps it’s the same reason why they refrained from cutting production last time? I remember that Saudi Arabia did mention that they don’t mind seeing oil prices lower in order to hurt US oil operations.

      • ForExchange

        Hi Forex Gump,

        yes, after all why should Saudi Arabia cut production to help others? IBM will never cut production to help its competitors, right? I believe they also do not care much if their OPEC alliance members will be hurt. After all they are just like competitors like the US. Already on the last OPEC meeting more countries told they want to cut production and they were ignored. So of course it can be always something different but I do not know why it should be.

        Have a nice day,

        FE

        • Looks like most market participants are sharing this view right now. News of a potential OPEC emergency meeting and oil production cut seem to have triggered a knee-jerk reaction but did nothing more than get people’s hopes up then fail to deliver. Are you pricing in another leg lower for oil prices and the Loonie also?

          • ForExchange

            WIth the Loonie I do, with Oil I am more cautious. The Loonie can have a longer negative effect because of oil I believe but Oil trend can change in any day. I am bearish on it however we are getting to very low levels where my comfort level is not that high. So if trading it then down with tight SL and I rather want to run it up when it is all over.

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  • Forex Gump

    Yep and with the BOC no longer inclined to cut rates further, I’m easing off a bearish Loonie bias. What do you think?